18 February 2014

Uganda: Police Cracks Down On NHCC Manager

A senior manager at National Housing and Construction Company (NHCC) is under police investigation, accused of orchestrating a series of negative media reports about its board members and senior government officials.

Police sources have told The Observer that Caleb Kakuyo, the company's chief commercial officer, was questioned on February 11 at Kibuli, the headquarters of the Criminal Investigations and Intelligence directorate (CIID).

He denied all charges. He was questioned alongside Elizabeth Rumanyika, a former employee of NHCC.

Sources in CIID told The Observer that the NHCC board filed a complaint (file number GES91/2014) alleging that Kakuyo, working with other people, was behind media reports about NHCC that shone a light on massive corruption and mismanagement at the body.

In the complaint, the board also claimed that some key documents had mysteriously gone missing. The sources told us that although Kakuyo denied the allegations, the police had some strong evidence. Investigating officers played for him a 13-minute recording in which he alleges that some bosses at NHCC and government ministers were to blame for the mess at the company.

In the recording, which The Observer has listened to, he claims to have connections with the president and boasts that he can finish off anybody. He also says, in the recording, that he has a network of journalists whom he can rely on to do his work.

The recording was reportedly obtained from Denis Tibagwa, an accomplice who had been arrested earlier. Tibagwa previously worked as a manager-cum-journalist at a leading newspaper.

The Observer could not independently establish Tibagwa's motive for recording the tape, but the police has its own suspicions. Sources told us that Tibagwa was arrested when he approached the board chairperson, Agnes Kalibbala and threatened to expose her in the media if she did not give him money.

When contacted, Kakuyo declined to comment about the allegations, saying he did not want to jeopardize the investigations. Indeed, CIID boss Grace Akullo told The Observer on Monday that investigations into the matter were still ongoing. She said police would interview other managers.

"I cannot tell you what we have got. That is not for you but the case is still open," she said.

Numerous problems

NHCC has been in peril for much of the last year. For long, body did not have a chief executive officer as the recruitment process dragged on for more than a year after the IGG received complaints that it was not transparent.

This hampered some of the organisation's programmes and created friction between management and the board over who was in charge. However, recently Felix Okoboi was appointed as chief executive, replacing Mohammed Benomoran, the Libyan whose contract expired early 2013. Okoboi takes over in March.

We also reported last year that the Office of the Auditor General (OAG) and Parliament had instituted a special forensic audit of the National Housing and Construction Corporation Limited (NHCCL), following reports of corruption and mismanagement of the company.

The audit followed queries raised by the parliamentary committee on Commissions, Statutory Authorities and State Enterprises (COSASE), which had been examining various NHCCL reports.

Among other issues, the committee found out that the company had mismanaged two projects--the Naalya Pride and purchase of land in Kireka-something that could have cost it billions.

Under Naalya Pride, NHCCL entered into a joint venture with a Malaysian firm to construct houses in Naalya. NHCCL even went ahead to secure a loan of $5.4 million ( Shs 12.5bn) from Housing Finance Bank to construct houses near Quality supermarket in Kyaliwajjala.

However, a couple of years later, the project stalled under unclear circumstances. As for the Kireka land in Kasokoso, NHCCL entered into a deal with a firm, Kireka Estates, to gain possession of the land but it has spent Shs 13bn so far (in trying to get the land), whose cost had been put at Shs 7bn.

In June 2013, the OAG appointed a team of six auditors to conduct a special audit of the National Housing projects. The report is expected next month.

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